Bizspace Spotlight

Katrina Landis, CEO of BP Alternative Energy, was here in the Petro Metro this week to address the Women’s Energy Network as part of the group’s charity luncheon to benefit Aid to Victims of Domestic Abuse.

I caught up to her beforehand to find out what’s new in the alternative side of energy and, as expected, found Landis to be optimistic about the segment’s future.

What’s perhaps of most interest to HBJ readers is that Landis, who is based in Washington, D.C., confirmed that BP Alternative Energy is in the process of moving its biofuels unit from Chicago to Houston. We wrote about the apparent exodus from Chicago and San Francisco last August when an unspecified number of BP workers were making the move. It’s a staff of about 100 wind experts and 40 biofuels employees, plus openings for another 20 workers. Depending on the success of a plant being built in Florida to convert grasses into ethanol, the company may build a similar facility in Texas, she said, that would create between 600 and 800 construction jobs and then another 200 permanent positions. Landis wouldn’t tell me where BP is planning the Texas plant, but she did say it would be somewhere with sufficient rainfall so it doesn’t raise concerns about water usage.

Where does the Lone Star State get the most rainfall? Looks like it could be promising for the Houston area.

Landis said BP began ramping up investment in alternative energy R&D in 2005, with a plan to spend $8 billion during the next 10 years. By the end of this year, BP will have completed that investment, which includes 13 wind farms and other projects. This year, the company has slated $1 billion to build two wind farms, one in Pennsylvania and one in Kansas; BP has already invested in four wind farms in Texas.

Given the swelling demand for energy, Landis said she expects continued growth in the alternative fuels sector, which will in turn create jobs.

“One of the points that many people in the U.S. are beginning to understand is there has been real job creation in the U.S. as a result of the development of alternative energy sources,” she said.

A recent study showed that during 2012, about 78,000 domestic jobs will be generated by wind energy.

What do you think? Will alternative fuels help meet global energy needs, or will the world’s thirst for oil keep alternatives on the backburner? Leave a comment on my blog at houstonbusinessjournal.com.

API takes stock of latest energy earnings reports

The American Petroleum Institute took a proactive step this week to prepare for the seemingly inevitable criticism that accompanies the quarterly financial reports of energy company profits.

As U.S. oil and gas companies release their earnings for the first quarter, John Felmy, API’s chief economist, told reporters in a conference call exactly what it means when domestic energy companies show profits.

Currently, he said, the industry supports 9 million jobs and could generate thousands more. One in 10 new jobs created is in the oil and gas sector. By 2030, the industry could have produced 1.4 million new jobs.

Much of the earnings to be reported in the coming days will be reinvested into the companies that produce them. Talk to a CFO at any of the companies investing in assets, especially offshore and abroad, and you’ll hear about billions of dollars being reinvested. Between buying leases for spots to drill and the multimillion dollar equipment needed to extract hydrocarbons from the ground, energy is a capital-intensive business.

In fact, an October report from API showed that, in 2011, the folks who actually own most of the stock in energy companies aren’t energy executives, but pensioners.

According to “Who Owns America’s Oil and Natural Gas Companies,” 31.2 percent of energy stockholders in 2011 were pension funds, followed by 20.6 percent asset management companies, such as mutual funds. Slightly more than 21 percent is held by individual investors, and 17.7 percent is in Individual Retirement Accounts.